Organic NPD vital to survive mainstream 'healthification'

"Organic food tends to mirror the category that it is in - organic milk sales increase when total milk sales increase - though of course, organic has its own specific appeal to its own shoppers with its own specific dynamics," says Hamish Renton.

The organic sector has cultivated a culture of ethical awareness among consumers that conventional manufacturers are now cashing in on – and new product development is vital for the sector to retain its value, say experts.

Steve Osborn, principal consultant at Aurora Ceres, said the food industry has seen a general tendency towards an ethical middle ground with conventional companies promoting their adherence to some of the ideals of the organic sector – natural, clean labels, best practice and a more ethical approach in general – without actually having the certification.

Watering down organic’s value?​

For Hamish Renton, managing director of Hamish Renton Associates, the rise of non-GMO​​ could be an example of this.

“One could argue that n​on-GMO foods are gaining popularity as ‘watered down’ versions of organic with consumers feeling they are being healthy and natural while not paying the premium associated with organic foods.​

“While popular in the US though, non-GMO foods have not reached the mainstream in most countries.”​

Osborn warned that this trend - the 'healthification' of non-organic food - could potentially lower the value of the organic logo in consumers’ eyes - although he added that organic proponents should be be happy that some of their core values were propagating.

'Take a leaf from conventional industry'​

And while the Soil Association’s website stresses that an organic logo offers the only guarantee that consumers are buying a genuinely organic product, Osborn said that companies needed to focus more on processed foods for greater market penetration and to ensure that diminished value did not become a reality.

“Just as mainstream [producers] adopted some of the philosophy from the organic movement…organic needs to take a leaf from the conventional food industry,”​ he said.

“Yes you can get organic bananas, coffee and cocoa but most people, even organic customers, still want to buy processed foods."​

This means innovating to overcome problems related to texture or colour that conventional food manufacturers do not experience.

He spoke of how some manufacturers had struggled to sell organic marzipan as supplies were seasonal-dependent leading to slight variations in colour, giving a greenish tint to some products.

“Even organic consumers aren’t accepting of such variability – the mainstream market has homogenized products and this homogenization is seen as a mark of quality.”​

Organic consumers receptive to innovation​

Renton confirmed that providing organic versions of basic, essential products – fruit, vegetables, meat, cheese and pasta - has accounted for most of the organic sector’s growth. But he added that NPD was fuelling growth in new categories.

“Dairy is probably the biggest category with organic products making up around 28% of spending. Yoghurt is a particular growth category. Customers tend to be very loyal to organic dairy products,"​ he said.

Cereals, baby food and biscuits are also a growing part of the market.

“Innovation is helping drive growth with lots of NPD (…) Consumers are also more likely to be under 34, a segment more receptive to innovation.”​

Meanwhile at last month’s Natural Food Show at London's ExCel centre, the organic category had the highest number of entries at the NPD showcase which, according to the organisers, reflected the increasing confidence and continued investment within the organic market.

So are organic shoppers more responsive to food fads - such as the latest healthy superfood - than buyers of conventional produce?

It depends, said Renton.

"A third of organic consumers buy organic for health reasons. These consumers are likely to be more susceptible to fads which are often emerging on claims of health benefits. However, those buying organic for environmental or animal welfare considerations are likely less susceptible to such fads."​

According to a 2015 OMSCo report​​, the European organic market has shown consistent growth since 2004 and is currently valued at £18.3bn (€25.2bn).